December is always a crucial period of analysis for my long-term portfolio. I see it as a great time to reflect on my watchlist and see how these FTSE 100 shares performed this year. It also gives me a chance to reflect on businesses I missed out on that could continue their good form into next year.
Three FTSE 100 shares from my list stand out when I look at their 2021 performance, sector potential, business model, and financials. Here’s why I will be looking to add them to my long-term portfolio in 2022.
I have followed JD Sports (LSE:JD) closely in 2021. The sports fashion retailer has shown immense recovery potential this year, after the gradual easing of restrictions. JD is up 43% so far in 2021. The company used the lockdown effectively to expand its global presence by acquiring some cut-price stores in North America in early 2021.
The purchase of DTLR Villa in March for $504m added 247 stores across 19 states in the US. The country is a huge market for sneakers and I think this move has already bolstered business. JD has raced past its pre-pandemic 2019 figures. Revenue in the first half of 2021 grew 42% to £3,885.8m. Profit before tax went up a whopping 177% to £439.5m.
But post-pandemic buying patterns are bound to normalise. And JD’s huge net debt of £1.15bn (on 31 July 2021) will eat into revenue over the next few years. But I think JD’s impressive breakthrough in the US could allow for a strong showing in 2022, which is why I’m considering this stock.
95%+ returns in one year
Another sports-based FTSE 100 share I have been looking at is Entain (LSE:ENT). The sports betting firm operates subsidiary brands like Bwin, Ladbrokes, and PartyPoker. Its share price is up 95.7% in the last 12 months and an incredible 422% since March 2020.
Sports made a swift comeback after the pandemic, especially in the UK. And this brought with it betting fans. But the big reason for the Entain share price boom was a failed US$22.4bn bid by American gambling giant Draftkings.
Despite the deal falling through, I think Entain is making strong moves. Its $1bn bid for Olympic Entertainment Group (OEG), a betting partner of the NBA in America, could prove very fruitful. The bid includes 100 casinos and betting halls. Also, the company has been posting double-digit online growth for 23 consecutive quarters, which is impressive.
But, online betting is under pressure over the lack of restrictions in spending limit or hours spent. This has led to calls for stricter regulations in the market. If enacted, new regulations could cause revenue to plummet. But, I still think Entain could grow steadily in 2022, given how western sports are attracting a global audience now.
I wrote about Diageo (LSE:DGE) shares on 1 October when they were trading at 3,530p. They are currently trading at 3,892p, a 9% increase in two months. The company’s performance over the last 12 months has also been impressive, recording a 33.3% return on investment.
The company has been using its vast cash reserve, worth £3.7bn, to expand in Latin America, Africa, and Asia. There are concerns, however, surrounding export regulations and falling global alcohol sales. But Diageo has been improving margins and revenue steadily. This proven FTSE 100 stalwart could continue its upward momentum and has become a must-buy share for my portfolio in 2022.
Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.
Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.
The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.
But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.
Suraj Radhakrishnan has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.